J. Jill Inc. JILL, -7.31% was downgraded to market perform from outperform at Cowen & Co. with analysts seeing a risk to earnings from the changes to product, marketing, and digital experience the women's apparel retailer has planned. Cowen cut the price target to $6 from $9. J. Jill shares closed down 10.5% on Tuesday after it reported declines in both earnings and sales for the second quarter. Company executives who spoke on the earnings call said changes are coming, including exclusive capsule collections for the e-commerce site and updated imagery. Cowen analysts led by Oliver Chen are optimistic about the long-term, but see risks to medium-term earnings from the changes, which executives say won't reap financial rewards until the second half of 2019. "There is also the possibility and probability of an earnings or margin reset, which may take place if management's assessment of the current situation and opportunity requires price investment, lost sales, or near-term customer friction for long-term customer value gain," analysts wrote. While Cowen believes the brand has loyal customers, analysts are taking a "wait-and-see approach." J. Jill shares are down more than 17% for the week so far, and down 12.2% for the year to date. The S&P 500 index SPX, +0.05% is up 7.1% for the period.
Have breaking news sent to your inbox. Subscribe to MarketWatch's free Bulletin emails. Sign up here.